50/30/20 Rule:
A Simple Budgeting Technique
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Budgeting is an excellent way to see exactly where our paycheck goes each month.
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The 50/30/20 budget rule is a budgeting rule that can help you stick to a budget and be able to save more each month.
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The 50/30/20 rule
is a simple budgeting framework that divides after-tax income into three major categories;
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50% for essentials, 20% for savings and debt payments, and 30% for everything else, sometimes called your needs, wants, and savings.
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Where Did the 50/30/20 Rule Come From?
The 50/30/20 budgeting rule was popularized by Senator Elizabeth Warren when she was a law professor at Harvard.
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Why Is a 50/30/20 Budget Necessary?
Budgets create responsible use of money, and using money responsibly will turn into larger savings accounts and retirement funds.
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How To Use the
50/30/20 Rule Budget?
Using the 50/30/20 rule, calculate the monthly income or take-home pay. Look at the paycheck and see how much ends up in your bank account each payday.
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